Switzerland renews reduced VAT rate on hotels

Thu 31st Jan 2013

The reduced 3.8% VAT rate on hotel accommodation is set to continue for another four years. This means Switzerland has the lowest VAT rates on hotel, with countries such as the UK charging the full standard VAT rate.

The decision by the Swiss Federal Council will cost Switzerland an estimated CHF 180 million per annum.

Most European Union countries offer specially reduced VAT rates on hotel stays, and the trend is downwards. Ireland will continue its subsidising of its crucial tourism industry through a reduction of the hotel VAT rate to 9%. It had already cut it from 13.5% in July 2011. Germany cuts its accommodation VAT rate from 19% to just 7% in 2010. France levies just 5.5% VAT on hotels, and Spain charges 8%.

The UK still charges its full standard VAT rate of 20%. Denmark is the only other EU country to charge its full VAT rate, 25%.



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